Novartis Looks for New Office Space in Mumbai

Swiss drug maker Novartis is scouting for real estate space in
Mumbai to house its new India headquarters, people familiar with
the development said.

Novartis has an office in Sandoz House in Worli, occupying an
area close to a lakh square feet. The company is said to be looking
for space in Lower Parel in central Mumbai.

According to a source, the company plans to take around 1.5 lakh
square feet space on lease. Currently the lease rents in Lower
Parel range between R130 and R170 per square feet per month. By
these estimates, the deal size would be in the range of R23 crore
and R31 crore annually."As a policy, Novartis does not comment on
market speculation," a Novartis spokesperson told FE in an
email.

According to sources, the development is in early stages and
Novartis will soon float a requisition for hiring a consulting
agency to take the process forward. Pharmaceutical firms have been
aggressively looking for real estate space in Mumbai. Major players
such as Cipla, Sanofi-Aventis, Pfizer, and Johnson & Johnson
have recently started the process of moving into modern buildings
with better amenities. According to market estimates,
pharmaceutical companies are expected to lease 10-15 lakh square
feet of office space in India in the next two years. Large local
consumption, abundant talent pool and comparative lower cost in
India have led to pharma companies setting up shops in India in the
recent past.

Last year, Pfizer consolidated its corporate functioning in
Patel Estate in the western suburb of Jogeshwari by taking up
around one lakh square feet space, and is believed to be paying a
monthly lease rent of about R100 per square feet for it. Johnson
& Johnson also picked up two lakh square feet in Oberoi Commerz
I in the western suburb of Goregaon last year, and is also believed
to be paying close to R100 per square feet as lease rent.

"Most of the pharmaceutical companies are in a consolidation
mode so they are looking at having one prime property centrally
located and have main operations under one roof and then have 2-3
other offices for backend work," said one of the persons familiar
with the development.